ROHIT DHAWAN Vs. G K MALHOTRA

JUDGEMENT

(1.) On 2/10/1999 parties entered into an agreement under which the defendant company was to manufacture two herbal medicines for diabetes management under two brands namely "Glunorm" and "dbNorm" which work as co-adjutants for diabetic therapy and the plaintiff was to have the exclusive selling and marketing rights in respect of two brands all over the world. Relevant portion of terms and conditions contained in agreement II dated 2/10/1999 are as under :-

(2.) It is alleged by the plaintiff that defendants did not adhere to the terms and conditions of the agreement. There were consistent defaults on the part of defendants. The defendants were required to supply 5000 capsules, 4500 on Invoice alongwith 500 free capsules as samples for market survey within 21 days of signing of the agreement but defendants never sent the said consignments. Further, the defendant had agreed to deliver to plaintiff the subsequent consignment of one lakh capsules alongwith 10% free samples under the agreement within two months. But the said consignment reached the plaintiff on 14/3/2000 i.e. after a gap of five months from the date of signing of agreements by the parties. It is further alleged that as per the agreement between the parties, deliveries of medicines/stocks was to be made on the basis of mutual understanding of the parties and there was no agreement for a minimum upliftment of medicines/stocks by the plaintiff. It is alleged that defendants dispatched consignments to plaintiff under the guise of shortage of storage space with them and thereafter started compelling the plaintiff to pay for the same, though the same were dispatched to plaintiff on Form-F. It is also alleged that as per the agreement dispatches were supposed to be billed at the agreed price of Rs.5.85 per capsule inclusive of sales tax but the defendants billed the same at a price of their own choice and that price varied from consignment to consignment. The defendants also failed to supply sales promotion material to the plaintiff like the product catalogues, visual aids etc. which were utmost necessary for promoting the sales of a medicinal product of such a serious disease. The defendants supplied product catalogues only after five months and visual aids after eight months, seriously hampering the sales promotional strategies of plaintiff. Plaintiff at one point of time negotiated for procuring orders for Glunorm from international trade market specifically from Canada for which requisite data, technical details etc. was required from the defendants but the defendants miserably failed to provide the same thereby resulting into loss of reputation of plaintiff in the international trade market.

(3.) It is further alleged by the plaintiff that initially defendants had told the plaintiff that infrastructural/project cost for manufacturing the said medicines/brands was Rs.12,00,000.00. lacs and plaintiff's contribution was to be Rs.6,00,000.00 lacs as per agreement.